Background of the Caspian Pipeline Consortium
The Caspian Pipeline Consortium (CPC) represents a critical energy infrastructure linking Kazakhstan’s vast oil reserves to global markets. This 1,500-kilometre-long pipeline transports crude oil from Kazakhstan’s Tengiz field to the Black Sea port of Novorossiysk, serving as a vital export channel. The consortium was established on July 17, 1992, through an agreement between the Republic of Kazakhstan and the Sultanate of Oman. The Russian Federation joined as a signatory one month later. In 1996, the project expanded to include eight private shareholders representing major oil producers from seven countries. For Kazakhstan, the pipeline constitutes one of its most significant energy projects, facilitating oil exports to European markets through Russian territory. Approximately 80% of Kazakhstan’s oil exports go through this pipeline, making it strategically important for the country.
Russia- Ukraine War and Its Effects on the CPC
Since the onset of the Russia- Ukraine war, Kazakhstan has encountered numerous technical and political obstacles that have disrupted its oil exports. In June 2022, oil shipments through Novorossiysk were suspended after alleged World War II-era mines were discovered in the port’s waters. The following month, Russia halted the pipeline’s operations shortly after Kazakhstan’s President publicly declared non-recognition of self-proclaimed republics in eastern Ukraine.
By August 2022, the CPC announced a reduced oil flow through Novorossiysk due to defects in floating storage tank systems. This breakdown was projected to decrease Kazakhstan’s oil supplies by approximately 15 million tons—roughly 50% of the annual export volume planned for the pipeline. The disruptions continued into late 2023 and early 2024. Further suspensions of Kazakh oil shipments occurred in December 2023 and April 2024, though experts suggested these particular incidents were not politically motivated.
The most significant disruption occurred when Ukrainian drones struck the Kropotkinskaya oil pumping station—a key component of the CPC pipeline in Russia’s Krasnodar region. According to CPC operators, this attack necessitated the temporary shutdown of the Kropotkinskaya station, the largest such facility on Russian soil. While no casualties or oil spills were reported, the impact on operations was substantial.
Ukrainian sources, including the Security Service of Ukraine (SBU) and Special Operations Forces (SOF), claimed responsibility for the attack, citing the pipeline’s role in supporting Russia’s military-industrial complex. The strike reportedly involved seven drones armed with high-explosive warheads, causing significant damage to energy infrastructure, including a gas turbine unit and a substation. Russian authorities projected a 30–40% reduction in CPC throughput for the next six to eight weeks, with implications for global supply chains.
Logic of Diversification and Strategic Considerations
In response to these challenges, Kazakh authorities have accelerated efforts to diversify the country’s oil export routes. Political, economic, and security considerations drive this strategic pivot.
From a political perspective, Kazakhstan aims to reduce its dependence on the CPC pipeline that transits through Russia, which has granted Moscow significant leverage, as demonstrated during the 2022 disruptions. By establishing alternative export pathways, Astana seeks to strengthen its political independence and minimize vulnerability to external pressure. Diversification also supports Kazakhstan’s balanced, multi-vector foreign policy by fostering relationships with regional powers beyond Russia. This approach aligns with European Union interests, as the EU increasingly seeks to diversify its energy import routes to reduce Russia’s political influence, potentially creating opportunities for deeper Kazakhstan-EU engagement.
Economically, developing multiple export options creates competition among transit countries, enhancing Kazakhstan’s bargaining position to negotiate lower transit fees. A diversified export infrastructure also secures more stable revenue streams for the national budget, reducing economic volatility. Perhaps most significantly, Kazakhstan’s current limited export options restrict its ability to capitalize on regional price differentials between European, Mediterranean, and Asian markets. Diversification would enable Astana to adjust oil flows strategically, maximizing returns based on market conditions.
The strategic rationale for diversification includes creating redundancy against both technical failures and political disruptions. Different export corridors pose varying vulnerability profiles to both physical and cyber threats, allowing risk distribution. By reducing dependence on Russian transit routes, Kazakhstan can position itself as a reliable supplier to multiple markets. Diversification also fosters interdependence between Kazakhstan and various regional powers, increasing their stake in Kazakhstan’s stability and potentially deterring aggression. This consideration has gained urgency following provocative statements from certain Russian politicians and media figures questioning Kazakhstan’s sovereignty since the beginning of the Ukraine war. By enhancing its strategic value to Russia, the EU, and China, Kazakhstan may create a deterrent against potential territorial ambitions from any quarter.
Different Route Options and Challenges
Kazakhstan is actively exploring multiple export pathways to reduce its dependence on the CPC. Each alternative route presents distinct opportunities and challenges that will shape the country’s energy export strategy in the coming years.
a. Kazakh-Chinese Pipeline
The Kazakh-Chinese Pipeline (KCP) represents one potential alternative route for Kazakhstan’s oil exports. This system consists of two main segments: the Kenkiyak-Kumkol section (794 km long with a capacity of 10 million tons per year) and the Atasu-Alashankou section (965 km long with a capacity of 20 million tons per year). While the overall system can theoretically transport up to 20 million tons annually, significant bottlenecks limit its current effectiveness.
Only the final Atasu-Alashankou section maintains the full 20-million-ton capacity, while the Kenkiyak-Kumkol route restricts flows to just 10 million tons. Existing agreements with Russia further complicate this capacity limitation. Under a 2017 agreement extended in 2022, Rosneft secured pipeline access to deliver 10 million tons of oil to China annually for the next decade. Kazakhstan must also compete with discounted Russian oil in the Chinese market, limiting its export potential. According to industry experts, Kazakhstan can realistically supply only about 9 million tons of oil to China in the medium term.
To increase exports via this route, Kazakhstan needs to modernize its infrastructure and engage in sustained dialogue with China to understand Beijing’s long-term hydrocarbon import intentions. Despite its existence as an alternative pathway, the KCP’s potential for significant export expansion remains constrained without substantial investments and diplomatic coordination.
b. Trans-Caspian Route
The Trans-Caspian route offers Kazakhstan greater strategic flexibility, with two main variants. In this approach, oil is first transported from Kazakhstan’s western fields to the ports of Aktau or Kuryk via railroad, then shipped across the Caspian Sea to Azerbaijan’s Baku. From there, it can follow multiple pathways: the Baku-Tbilisi-Ceyhan (BTC) pipeline to Turkey’s Mediterranean coast, the Baku-Supsa pipeline to Georgia’s Black Sea coast, or by rail to the Georgian ports of Batumi, Poti, or Kulevi before continuing to European markets.
Kazakhstan has demonstrated increasing interest in this option since 2022. In 2023, KazMunayGas and the State Oil Company of the Azerbaijan Republic (SOCAR) signed an agreement to transport 1.5 million tons of Kazakh oil annually via the BTC pipeline. These shipments reached 1.4 million tons in 2024, with medium-term plans to increase volumes to 5 million tons yearly. An additional 5 million tons could potentially be redirected through the Baku-Supsa pipeline to Georgia, with rail deliveries from Baku to Batumi potentially adding another 5 million tons annually. In the long term, Kazakhstan aims to increase oil shipments via the BTC to 20 million tons per year. If successful, this shift would reduce the proportion of oil exports passing through Russia to approximately two-thirds of total volume—a significant transformation in the country’s export strategy.
A critical development supporting this vision is Kazakhstan’s plan to revive the Yeskene-Kuryk pipeline project, which would connect oil-producing regions in western Kazakhstan directly to the Caspian port of Kuryk. It will potentially allow substantially more Kazakh crude to bypass Russian territory. This infrastructure would also accelerate the development of Kuryk port, which has long been planned but has yet to achieve the rapid development authorities anticipated. The Yeskene-Kuryk pipeline would be essential for Kazakhstan to achieve its ambitious goal of increasing BTC exports thirteenfold, primarily by bringing Kashagan oil directly to the Caspian shore.
Despite Kazakhstan’s interest in developing this corridor, several significant obstacles remain. The country faces a critical shortage of tanker capacity, and existing vessels require restoration for effective operation. The oil loading capacity of Aktau port needs expansion beyond its current 12 million ton limit, and dredging operations are necessary to accommodate vessels with greater tonnage. Additionally, the declining water level in the Caspian Sea presents a long-term challenge that Kazakhstan must address to ensure reliable shipping operations in the future.
Conclusion
The Russia- Ukraine war has repeatedly demonstrated to Kazakhstan the inherent risks of dependence on a single export route. While the Kazakh government is eager to explore alternative options, meaningful diversification will require sustained investment in major infrastructure projects, particularly along the Trans-Caspian route. In the current state, Kazakhstan’s immediate options remain limited by technical, financial, and geopolitical constraints.
In the short term, Kazakhstan should accelerate small-scale shipments via the Trans-Caspian route to establish operational experience and build relationships with partners in Azerbaijan, Georgia, and Turkey. In the medium term, Kazakhstan would benefit from prioritizing targeted investments in critical infrastructure bottlenecks rather than attempting comprehensive development of all potential routes simultaneously. Upgrading port facilities at Aktau and Kuryk, expanding the existing tanker fleet, and addressing the capacity limitations in the Kazakh-Chinese Pipeline would deliver the greatest immediate impact. Similarly, securing international financing and technical support for the Yeskene-Kuryk pipeline project would provide momentum for the broader diversification strategy.
Kazakhstan’s path toward true export diversification remains challenging, but the country has demonstrated both the strategic vision and political will to reduce its vulnerability. By balancing pragmatic short-term measures with ambitious long-term infrastructure development, Kazakhstan can gradually transform its energy export landscape, enhancing both national security and economic resilience in an increasingly complex geopolitical environment.